With Obamacare repeal on ice – for now – Republicans on Capitol Hill are gearing up for their next big policy push: tax reform. It's a cause that House Speaker has championed for years, and with the GOP in control of both Capitol Hill and the White House, he'll now have his best opportunity in years to see it through.
"Face the Nation" host John Dickerson sat down with Speaker Ryan at a factory outside of Philadelphia. What follows is a transcript of the interview, which airs Sunday, October 1, 2017, on "Face the Nation."
JOHN DICKERSON: Mr. Speaker, we are at Pennsylvania Machine Works. I'm going to ask you a question a worker here asked you, how are these tax cuts going to help the blue-collar worker? What are they going to take home in their pocket?
PAUL RYAN: Well first of all, the whole purpose of this is to get a middle class tax cut, to help the people who are working paycheck to paycheck and keep more of their own hard-earned dollars. They haven't had a break in a long time. Our economy's been growing between one and two percent for a long time. We haven't had three percent growth in about a decade, and that means workers are struggling.
So number one, a middle class tax cut to help those families keep more where they earn. But number two, this business is a perfect example of how we need to help get tax reform to get the tax rates down on these businesses so they can stay competitive and keep hiring people.
JOHN DICKERSON: But I'm a blue-collar worker, what -- what's my paycheck going to look like? What am I taking home? What are you promising--
PAUL RYAN: It's going to be bigger. Well we're going to get--
JOHN DICKERSON: You promising anything? Can I-- do I know some money's coming to me?
PAUL RYAN: You know some money's coming to you. We're going to double that standard deduction. We're going to make it so he can fill out his taxes on a postcard. We're going to lower his taxes. That's really important. So he has more tax-home pay. But there's another component to this is, look at this machine shop, this business pays about a 40 percent tax rate but it competes with companies all around the world who pay an average 22 and a half percent on their taxes.
So we're going to lower the taxes on this business so it's globally competitive, so it can compete with its foreign competition. And then we're going to give this business an ability to write off the investments that they make in this business to buy more machines, to hire more workers, to raise wages. That, to us, is really important.
JOHN DICKERSON: I want to get back to the businesses in a second because there's obviously some debate about the effective rate they pay, but let's just stick to the worker for a minute. Can you guarantee that every middle class person will get a tax cut once this becomes a bill and then that passes?
PAUL RYAN: That's the purpose of doing this. The purpose of this is to get a middle class tax cut, to lower people's--
JOHN DICKERSON: So is that a guarantee?
PAUL RYAN: Well, I don't know every single person's little, small problem or issue--
JOHN DICKERSON: But it'll be minimal if nobody gets-- if I'm a middle class--
PAUL RYAN: The entire purpose of this is to lower middle class taxes, so yes, people are going to get tax cuts. How big are those tax cuts? That depends on the individual. Do you have kids? Because there's going to be a bigger child tax credit. Are you married? You're going to have zero marriage penalty--
JOHN DICKERSON: Well that's the worry because--
PAUL RYAN: Those are the kinds of things that will determine, based on how low people's taxes go, because we want pro-family tax code to make it easy for people to get--
JOHN DICKERSON: Because--
PAUL RYAN: --married, to raise kids, to work.
JOHN DICKERSON: You mentioned you're doubling the standard deduction, but you're also getting rid of some exemptions. And also the child tax credit is still up in the air, those numbers haven't been figured out yet--
PAUL RYAN: That's right.
JOHN DICKERSON: So when the math gets work out--
PAUL RYAN: It's going to go up.
JOHN DICKERSON: Right.
PAUL RYAN: But we don't know how much it's going to go up.
JOHN DICKERSON: But when the math gets worked out, there may be some families who do see their taxes increase. And I'm saying as an objective for the bill as it goes through its process--
PAUL RYAN: Right.
JOHN DICKERSON: --will you work to squeeze that number to as low as possible?
PAUL RYAN: That's exactly right. That's exactly right. So the objective is to lower taxes for middle class taxpayers.
JOHN DICKERSON: Let me ask you about something you've wanted to do in the past, you're not doing here, which is expanding the earned income tax credit for childless filers. It's a way to help people who are at the real bottom end, the people who've seen this inequality really face to face. Why is this not in there?
PAUL RYAN: Yeah, well we're still looking at-- we're keeping the EITC, of course, because we think it's pretty effective--
JOHN DICKERSON: But--
PAUL RYAN: But we're -- that's one of the things that the committee's still looking at. So--
JOHN DICKERSON: So it might happen.
PAUL RYAN: --within the framework of this bill are many other decisions that have to be made because the framework of this, and the reason we did it this way, is, unlike health care, we wanted to make sure that everyone was on the same page with respect to the house and the senate and the White House. Now working within that framework, we're going to be targeting these things so that we can make sure that middle class taxpayers get a break. And one of the things that we think helps move people into work is the EITC. So we want more work incentives. And EITC reform is clearly something we're going to be looking at--
JOHN DICKERSON: So you could expand it. Let me ask you this then, another thing that maybe will be in it coming in the process, the president had wanted to get rid of carried interest, the so-called carried interest loophole--
PAUL RYAN: That's something that the committee's going to make a decision on. What I made a decision--
JOHN DICKERSON: Why, shouldn't it be kind of a cinch?
PAUL RYAN: No, it should be something that the tax writing committees who are in charge of writing tax legislation will be deciding and working on. That is one of the issues they're clearly looking into. The point I'm trying to make here is, I like going through, what we call, the regular order process.
JOHN DICKERSON: But you're pitching this as a middle class tax cut. And you say every child in America should have an opportunity in this country, and that's been part of the American dream. But there are specifics in this. You're getting rid of the estate tax, the earned income tax credit. And it's not being expanded, it might be in the future.
The carried interest loophole is still in there. If I'm looking at this and I'm a middle class person, I'm thinking the estate tax people are taken care of, the alternative minimum tax, which will help the wealthy, that's getting taken care of, but the things that will help me, those aren't till later--
PAUL RYAN: Can I go through that? Can I get through that? We're going to double your standard deductions so you can file your taxes on a postcard. We're going to take people who are in the ten percent bracket and put a lot of that money in a zero percent tax bracket. We're taking the 15 percent bracket down to 12 percent. We're going to get rid of the marriage penalty. We're going to increase the child tax credit. We're going to maintain critical things like incentives for home buying--
JOHN DICKERSON: --but you know when people look at this--
PAUL RYAN: --charitable giving, education--
PAUL RYAN: Those are all-- just give me--
JOHN DICKERSON: Yeah.
PAUL RYAN: Those are all middle class tax things. The purpose of this is to help people who are living by a paycheck keep more of their own hard-earned money but also get more jobs, a faster-growing economy.
JOHN DICKERSON: Let me ask you about the theory behind the lowering of the corporate tax rate. If the corporate tax rate goes down, how do you know a company's going to put it back into wages? A lot of money from companies has gone to shareholders--
PAUL RYAN: --Most of that when you lower--
JOHN DICKERSON: --Most sat on the sidelines--
PAUL RYAN: -- that the tax on businesses is taken out of wages. So the point is--
JOHN DICKERSON: Actually, isn't there quite a lot of debate about that?
PAUL RYAN: Let me say it this way. Should we be taxing American businesses at much higher tax rates than our foreign competitors are taxing theirs? This business is taxed as high as 40-plus percent and their competitors are taxed on average 22 and a half percent. How does that help this business in global competition?
JOHN DICKERSON: I guess isn't the debate that a is an--
PAUL RYAN: So--
JOHN DICKERSON: --effectively the rates actually were quite lower than 40. And also, I guess, the question is--
PAUL RYAN: That's not actually always the case.
JOHN DICKERSON: Well--
PAUL RYAN: The point is, we know we're taxing our businesses at much higher tax rates than our foreign competitors are taxing theirs. And here's the point, John, businesses are leaving America. The current tax code discourages making things in America. The current tax code says, "If you're good enough to be big enough, to make money overseas, you can't even bring it back because of our tax laws."
JOHN DICKERSON: You have spent your life thinking about tax reform. The other thing you've thought about is--
PAUL RYAN: Pretty much have. Yeah.
JOHN DICKERSON: --fiscal issues. Will this tax plan increase the debt?
PAUL RYAN: It's going to be deficit neutral. That's the budget rules we use, which is call the Byrd rule.
JOHN DICKERSON: Yeah.
PAUL RYAN: So this will have to be a deficit neutral tax bill. But we do--
JOHN DICKERSON: But --
PAUL RYAN: --fundamentally believe that this tax code and this tax reform will give us faster economic growth. Faster economic growth helps raise the economy which raises revenues. And that helps us tackle the deficit. There's two things we've got to do to get rid of this debt. Deal with entitlements, that's why we're frustrated health care reform hasn't passed the senate yet. Deal with runaway spending, but also grow the economy. This helps grow the economy. So if you're asking me whether it's going to be deficit neutral tax reform, that's what it has to be for us to be able to pass the bill--
JOHN DICKERSON: After ten years? So it will -- but what about the debt, in terms of the additional money to the debt from this? Not deficit year-to-year but overall--
PAUL RYAN: If this results in giving us a faster economic growth, that will help us reduce our debt.
JOHN DICKERSON: What a lot of people who've known you for a long time and have worked on these issues, when they hear you say, "If this gives us growth," they say, "He's gone to the dark side."
PAUL RYAN: I think it's the bright side, which is economic growth--
JOHN DICKERSON: These are the-- sure. But they say the growth of the kind that--
PAUL RYAN: Two things.
JOHN DICKERSON: --we'll need to fund this is just beyond the reality--
PAUL RYAN: Two things. Two things. You've got to have tax reform to get faster economic growth. Faster economic growth is necessary for us to get our debt under control. But you also have to reform entitlement programs.
JOHN DICKERSON: Could you tie entitlement reform to this, as some in the Freedom Caucus want?
PAUL RYAN: You could, but I think we would kill tax reform if we did. Because, let me just show you one piece of evidence, the senate can't get health care out of the senate. So if we put something that has been proven to fail in the senate to tax reform, we would kill tax reform. So why would we do that?
JOHN DICKERSON: Well that leads us to politics. And the Affordable Care Act, it didn't make it through in the senate. Why is it going to make it through the senate this time?
PAUL RYAN: You talking about tax reform?
JOHN DICKERSON: Uh-huh.
PAUL RYAN: I think it'll make it through for a few reasons. Number one, we did this on the front-end, we negotiated a framework so that we all agree what this needs to look like at the front-end. In health care what we did was, we passed a bill in the house and then the senate looked at our bill and decided to go a different direction. And here we are. We have more consensus on tax reform as Republicans and we have less consensus on health care reform as Republicans.
JOHN DICKERSON: I don't hear you talking about working with Democrats on this. Why not?
PAUL RYAN: I talk to Democrats all the time, actually.
JOHN DICKERSON: But do you work with them on this in a real way--
PAUL RYAN: We do work with Democrats, but we're not going to give Chuck Schumer the ability to filibuster this bill because we think that would derail tax reform. Do we want Democratic involvement? Absolutely. Did the president have Democrats in the ways and means committee in the White House two days ago? Yes.
JOHN DICKERSON: Do you worry the president will go off and work with the Democrats?
PAUL RYAN: I think he should work with Democrats. But--
JOHN DICKERSON: On tax reform?
PAUL RYAN: Well I don't think you're going-- not on a filibuster. I think it would be a big mistake if we didn't use reconciliation, because we're basically dooming tax reform. But do we want Democrats to work with us on this stuff? Of course we do. He had Joe Donnelly on the plane yesterday going to Indiana.
Which, by the way, I really fundamentally believe some of these Democrats from some of these state are going to vote for this. Look, Indiana, number-one state for manufacturing. This tax reform so much helps these kinds of manufacturers. So I think when people look at their constituents, tax breaks for middle class families, making manufacturing more competitive, helping businesses stay in America, creating more jobs and faster economic growth, I got to think that some Democrats are going to listen not to the party leaders but to their constituents. And I think some of them are going to vote for this.
JOHN DICKERSON: A year ago we talked about race relations in the country and-- and you said you hoped candidate -- then-candidate Trump would be inclusive. You said, "He's new at this." It's been a year now. How would you rate his ability to bring this country together, which has clearly-- an issue--
PAUL RYAN: Well, like I said on the Charlottesville thing, it was-- there were like, three comments. One of them was great, two of them-- no, four comments, I think. Two good. Two bad. You know? I think, like you say, like I said before, he's learning. I know his heart's in the right place. And--
JOHN DICKERSON: How do you know that?
PAUL RYAN: Just-- I've had some candid conversations with him about this. Especially during that time. I've had some very candid conversations. And so I do really believe his heart's in the right place. I think what matters is that we have to show people that we are an inclusive society that--that--that we want everyone to succeed. And I think there's more that all of us as leaders have got to do to be inclusive with people and make people feel like they're included in society. And I don't-- I think we've got a lot-- a long ways to go, just as a society and a country for that.
JOHN DICKERSON: Here-- here's the criticism, you know it, with respect to the NFL. The president makes the case for those who see the kneeling at football games as an act of disrespect and he argues about patriotism. He never mentions the reason that-- that the players, some, have chosen to kneel and what that's about.
PAUL RYAN: Yeah.
JOHN DICKERSON: Should that be addressed by a national leader? Isn't that part of the conversation?
PAUL RYAN: Well that has-- we-- there has been conversations. We've had these police shootings, Ferguson, that has been a national conversation. No two ways about it. We have -- we do hearings on this. We-- we've-- I set up a task force last year after the police shootings, bipartisan task force.
JOHN DICKERSON: But, I mean, as the president--
PAUL RYAN: So--
JOHN DICKERSON: --he's spending time on one side of the argument--
PAUL RYAN: Yeah, but I think--
JOHN DICKERSON: Suggest, in fact, holding the opposite view and being concerned--
PAUL RYAN: --But I do think he's got a point which is-- what I think a lot of people who are protesting on that don't necessarily see is that other people see it as disrespecting the country, what it stands for, the flag and the people who died to protect it. So I think clearly people have a right to express themselves in the first amendment however they want to.
But what so many Americans, I see this at home, see is you're disrespecting the idea of America, that we want to make this free country a more perfect union and that people have died and fought and survived to protect it. So they don't see the point that they're trying to make. That's what I'm trying to say. So yes, I think we should just have separate and distinct conversations. Because when you merge it into the flag and the anthem, it's lost.
JOHN DICKERSON: All right, Mr. Speaker. Thanks so much for being with us.
PAUL RYAN: Oh you bet. Thanks, John.